One would think it's based on new SPEND each month and not existing balances. Otherwise... you would be getting cash back and paying interest?
I think that is partly right. To qualify for the cash back in any month, you need to have an opening debit balance, then you deduct this month's repayments from the opening balance to determine the applicable cash back % (ranging from 0.5% to 4%), which is then multipled by this month's new spend.
If you pay off the opening balance in full by the due date during the month, no cash back for you. (Why? Because zero x 4% x new spend = zero).
If you did
not pay off the opening balance in full by the due date during the month, you will qualify for the cash back but you will be paying interest on your card.
So it seems to me that this card would not benefit a transactor who pays their card off in full each month , but (all other things (like interest rates) being equal)
may suit a revolver who doesn't pay their card off in full each month.